Thomas McKenna

1

• Thomas McKenna
• Assistant Director of Aviation - Marketing

2
FAA Economic Forecast

• 2.0 percent increase in domestic enplanements
  for 2003
• 3.5 percent increase in domestic enplanements in
  long run (2004-2014)
• Traffic returns to Pre-911 totals by 2006
• Low fare carriers increase market share
  falling fares
• 5.0 percent increase in air cargo for 2003 and
  beyond

3
Industry Overview - Airlines

• Bankruptcy Chapter 7 or 11
• Vanguard
• US Airways
• United
• Whos Next??
• American
• Delta
• Midwest
• Northwest
• Capacity Cuts
• Layoffs/Unions
• Reduction of flights/destinations
• Regional Jets/Low-cost carriers
• Alliances/Partnerships/Merges

4
Regional Jets

• 91 Regional Jet Airlines
• 1/3 of U.S. commercial airline fleet
• Fastest growing segment in commercial aviation
• 1 out 8 domestic airline passengers flies on a
  regional airline
• 82.8 million passengers boarded in 2001 double
  1991 totals

Source Regional Airline Association April 2002
5
Industry Overview - Airports

• AIR-3 Reauthorization
• Establish a new federal airport partnership
• Protect capacity investments
• Increase airport financial flexibility
• PFC streamlining
• Essential Air Service
• Small Airports affordable access to Air Service
• Security Mandates
• Expand federal reimbursement

6
Economic Impact of KCI

• 3.2 billion to the Kansas City Economy
• 67,400 total employment
• 1.5 million in total payroll expenses
• Headquarter Relocation Program
• Geographic Location
• Life Style
• Air Service

7
Nonstop Destinations 55 Daily Nonstop
Departures 212 Daily Nonstop Seats 23,811
Source Official Airline Guide, schedules for the
week of March 10 16, 2003, February 2003, Max
edition and announced new service.
8
IOWA
NEBRASKA
Dubuque
Sioux City
Waterloo
Cedar Rapids
Des Moines
Davenport
Iowa City
Omaha
Lincoln
KCI
KANSAS
Columbia
St. Louis
Wichita
Springfield
Joplin
MISSOURI
Enid
Tulsa
Fayetteville
Ft. Smith
Oklahoma City
Memphis
Little Rock
Lawton
Pine Bluff
OKLAHOMA
DMA Populations 2,780.0 Income (EBI in
billions) 49.9 Approximate Population of San
Diego
Texarkana
ARKANSAS
DMAs of Kansas City, St. Joseph and Topeka
DMA Designated Market Area. Source Sales
Marketing Management, Survey of Buying Power,
September 2002
9
KANSAS CITY IS NOT DOMINATED BY A HUB CARRIER
Year Ended March 2002, Enplanements
Note Includes only U.S. carriers reporting T-100
data. Source U.S. DOT, T-100 data, via Data
Base Products.
10
PROFILE OF THE KANSAS CITY DOMESTIC MARKET(Year
Ended March 2002)
Domestic OD passengers Average yield Average
passenger haul
8,885,500 13.0 930 miles
Sources U.S. DOT Origination-Destination
Passenger Survey, year ended March 2002, via Data
Base Products,
11
Load factor has improved by 6 points to 64 over
the last ten years
Seats/Passengers
Seats
Passengers
Year Ended
Source U.S. DOT, T-100 Data, via Data Base
Products.
12
Canada/Greenland
Over 430,000 international passengers in YE June
2001
Nearly 60,000
KCI
Over 150,000
Europe
Nearly 50,000
Asia
Nearly 80,000
Over 60,000
Caribbean/ Central America/ South America
Mexico
Source U.S. DOT Origination-Destination
Passenger Survey via Data Base Products, YE June
2001.
13

• KCI PROJECTS
• Terminal Improvement Project
• Consolidated Rental Car Facility
• Economy Lot

14
TERMINAL IMPROVEMENT PROJECT

• KCIs 258 million Terminal Improvement Project
  will
• Better distribute passenger traffic among the
  three terminals
• Widen walkways in all terminals
• Improve information displays for flights and
  baggage

• The short curb-to-gate distance of 75 feet will
  not change

15

• KCIs 258 million Terminal Improvement Project
  will
• Provide unique baggage claims areas for all
  airlines
• Add many PC outlets and establish a new business
  center
• 50 more concession space

• Expected completion 2004

16
Economy Lot

• KCIs 62 million Economy Lot will provide
• Dedicated terminal lots shuttles
• Real time parking airport information
  (Kiosks)
• 15,000 new low cost parking spaces
• Additional security cameras for patrons safety
• Faster travel time from new lots to terminal

New Employee Lot
C
B

• Expected completion 2003

A
17
Consolidated Rental Car Facility

• Benefits to the airport user
• Customer convenience
• Closer to the terminals
• Flight information display
• Additional on-airport rental choices

• Expected cost 86 million

• Expected completion 2005

18
Air Cargo
19
Air Cargo means business at KCI !

• All Cargo Carriers (20 flights per day)
• Airborne, BAX Global, DHL Worldwide, Emery
  Worldwide, FedEx, Kitty Hawk, UPS, and United
  States Post Office
• Largest cargo airport in six-states
• (NE,IA,MO,KS,OK,AR)
• Air cargo buildings on airport - 6
• 89 of all air freight is processed by the
  eight all-cargo carriers

20
FTZ Attributes at KCI

• Zone No. 15 - Site 3
• One of Largest FTZ airports in the US
• Benefits including Deferral payment of duties
  until goods are entered in the commerce of the
  United States
• Works with Greater Kansas City Foreign Trade
  Zone, Inc to attract companies that need airport
  location and FTZ benefits.

21
Types / Modes of Distribution

• Pipeline
• Water
• Rail
• Truck
• Air

22
Cost of Modes

• Pipeline
• Water
• Rail
• Truck
• Air

• 0.02 per ton mile
• 0.02 per ton mile
• 0.03 per ton mile
• 0.40 per ton mile
• 0.90 per ton mile

23
What percentage of World Commerce goes by Air?

• About 2 of World Trade by Volume
• About 40 of World Trade by Value
• About 2.5 trillion dollars of goods are uplifted
  by aircraft each year

24
What types of commodities move by Air?
25
Limits of Air Cargo

• History
• Belly Cargo
• Weight
• Size
• 747 today 100 tons (total Aircraft load)
• (118 inches high, 96 inches wide, 240 inches
  long)

26
Intermodal Air Cargo

• Air - Truck
• Sea - Air
• Air - Rail

27
Air Cargo Information Flow

• Freight Fowarder
• Custom Hose Broker
• Air Carrier
• Banks
• Customs Service
• Dept. of Agriculture
• Shipper
• Consignee
• ACS (Automated Customs System)

28
Not Just Jets

• Remote location (Helicopter)
• Airships (lighter than Air)
• Rockets (Satelitte Delivery)

29
DISCUSSION